Class actions back on U.S. Supreme Court’s radar

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There are plenty of big cases on the docket at the U.S. Supreme Court this term, dealing with issues ranging from search and seizure standards to affirmative action.

But the case that litigators will be watching most closely, although it may not grab as many headlines, considers a crucial question: Must plaintiffs seeking to certify a class action first prove that class-wide damages can be awarded, and if so, what evidence must they proffer?

In the wake of several Supreme Court rulings that have already drastically scaled back the types of class action claims plaintiffs can bring, lawyers are bracing for the potential impact of Comcast v. Behrend. Oral arguments in the case were heard on Nov. 5.

Plaintiffs’ attorneys fear an adverse ruling would make “class actions much more difficult to bring, much more expensive to bring, and would require many, many more experts to certify,” said Philip J. Gordon of the Gordon Law Group in Boston, an employment law firm that represents employees. “It would mean that millions of citizens will never get their day in court and never get the relief for the wrongs that are happening to them on a daily basis.”

But members of the defense bar say the justices have the opportunity to state directly what they have already hinted at in past cases: that evidence proffered by plaintiffs and their experts at the class certification stage must meet a standard similar or equal to that required at the merits stage.

“I think that this is an opportunity for the Supreme Court to articulate a standard,” said John B. Lewis, a partner in the Cleveland office of Baker & Hostetler, where he defends complex employment, civil rights and regulatory class actions.

The case stems from an antitrust suit filed on behalf of cable subscribers alleging that Comcast violated the Sherman Act by engaging in schemes to eliminate competition in the Philadelphia market.

Comcast argued that class certification was improper because the plaintiffs’ expert did not provide a workable model to prove damages on a class-wide basis. But the 3rd Circuit disagreed. The Supreme Court granted certiorari in June.

The case gives the Court an opportunity to settle an issue that has left litigators guessing: Does the standard for admitting expert testimony established in the 1993 case Daubert v. Merrell Dow Pharmaceuticals, Inc. (509 U.S. 579) apply at the class certification stage?

In the Supreme Court’s 2011 ruling in Wal-Mart v. Dukes, Justice Antonin G. Scalia made the following statement in dicta: “The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that is so.”

Most, but not all, lower courts have followed that dictum to varying degrees, leaving the state of the law unsettled.

Once the Supreme Court rules, it “will have implications for discovery, timing, costs and obviously strategy,” said Sean P. Wajert, a partner in the Philadelphia office of Shook, Hardy & Bacon and author of the Mass Tort Defense blog.